Example 34

Ram a trader for supply of goods raised invoice for Rs. 29000 (Rs. 25000 +Rs. 4000 (Central tax Rs. 2000 and State tax Rs. 2000) to a customer on 20.08.2017. The customer however has paid a lump sum Rs. 26000 on 28.09.2017 for full settlement. Calculate service tax and value of goods paid by customer and how this activity will be dealt in GST. Rate of CGST and SGST is 8% each.

Ans

Rule 35 (Chapter - IV of CGST Rules, 2017) , provides for the determination of tax and value. Full settlement value given in the example is Rs. 26000. Amount of tax and value of supply of goods will be calculated as under;

Amount of CGST and SGST  = Rs. 26000* 16/116

                                                = Rs. 3586 (CGST = Rs. 1793 +SGST = Rs. 1793)

 Value for goods = Rs. 26000 - Rs. 3586

                            = Rs. 22414

Sec-34 - Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient a credit note containing such particulars as may be prescribed.

Thus, credit note of value of goods 25000 - 22414 = Rs. 2586  and for  CGST amount  Rs 2000-1793 = Rs. 207 and credit note for  SGST for Rs 207 will be issued. Total amount of credit note Rs. 3000 ( 29000- 26000) will be issued.

   Determination of time of supply and determine the return in which the rectification will be shown